While most people associate home warranties with owners of detached dwellings, there’s no reason why someone who owns a rental property wouldn’t be allowed to take one out on their building. These policies have long been considered essential for individual homeowners, but the jury is still out when it comes to whether or not landlords need to invest in them.
Some companies are starting to provide their own answers to this question by instituting policies that are particularly beneficial for those who are subdividing their properties into various rental units.
Reasons to Take Out a Home Warranty on Your Rental Property
Like a traditional home warranty, one geared toward the rental industry would cover things like appliance replacement and HVAC repair. Most insurance policies wouldn’t cover these things because they wouldn’t be deemed constituent assets of the rental property’s physical plant. If something were to fail shortly after your new tenants moved in, then this kind of policy could easily pay for itself.
Getting a home warranty for rental property holdings may prove to be far less expensive a prospect today than it was only a few years ago. This is especially true for those who own more than one property. The overall cost of ownership drops dramatically as the number of properties covered increases.
Appliances and other systems installed in rental properties have a tendency to wear out more quickly than they would if they were installed in a detached home. That means they might need to be replaced more often, which can quickly add up. Accountants have expressed the opinion that home warranty costs could break even after a single replacement job.
Time is a major consideration as well. Landlords often don’t have the time to keep tabs on every rental property they invest in. By purchasing a warranty, you can be sure that you’ll always be able to dispatch someone if something were to happen.
Depending on your specific circumstances, however, you might be denied access to home warranty coverage. There are a few other options you might want to consider in this case.
Reasons to Opt for Renters’ Insurance
In general, individual renters aren’t going to be eligible for a home warranty on the places they live in. Whether they rent a condo or a traditional apartment, they technically don’t own the land they’re living on. That makes it difficult for home warranty companies to offer them the kind of deals they’re usually known for.
Renters’ insurance policies provide at least some of the benefits that you’d associate with a typical homeowner’s coverage plan. Lease agreements for larger properties often include a clause that requires tenants to hold at least some form of renters’ insurance. This is usually due to the fact that property owners do everything they can to protect their investments. If someone were to ruin the apartment they were living in, then these policies might provide the funds to repair any associated damage.
While this might not be of much interest to individuals, these policies should still provide at least some degree of coverage for anything that they might be keeping in the place they’re renting. Compliant third-party policies will provide the best coverage, and these might even satisfy any requirements outlined in the original lease agreement.
FEMA representatives have continued to promote independent flood insurance for people involved in almost any sort of living arrangement. That being said, if you physically own the property and rent it out it certainly looks like a home warranty is still the best bet.
Finding an Affordable Home Warranty for Your Rental Property
When you’re shopping for an affordable plan, keep in mind that some home warranties have hidden fees. Others might charge you more if you make frequent claims, which is a serious problem for those who manage larger properties. Always make sure to read the fine print before you agree to terms with even the most reputable of companies.
Those who take the time to shop around and find the right plan will find themselves reaping the rewards the next time they look down at their balance sheets and feel something other than a massive case of sticker shock.